What are the Best Retirement Plans for Clients Beyond a 401(k)?

Why advisors should offer comprehensive retirement plan options to clients

In a competitive financial advisory marketplace, distinguishing your services is crucial. Many businesses face challenges with market volatility and intense competition for talent, making them prime candidates for advanced retirement planning. By guiding clients toward these solutions, you demonstrate expertise, address complex financial needs, and solidify your role as a trusted partner.

Advisors who proactively educate clients on these alternatives can bridge the gap in financial literacy, helping business owners and key employees maximize savings and tax benefits. This client-focused retirement strategy enhances financial wellness and drives business growth.

Retirement plan options advisors can offer beyond a 401(k)

Consider these four advanced retirement plan solutions designed to meet the diverse needs of your small business clients, each offering unique advantages;

Cash balance plans

A cash balance plan is a hybrid plan that combines the high contribution limits of a traditional defined benefit plan with the flexibility of a 401(k). Each participant has an account that grows from employer contributions and a guaranteed interest credit, offering significant tax savings.

Best for:

• Highly profitable, family-owned, or closely held businesses
• Professional services firms (CPAs, law firms, medical groups)
• Older owners needing to catch up quickly on retirement savings
• Firms looking to attract top talent with competitive benefits

Client benefits:

• Enables substantial corporate and personal tax savings through high contribution limits
• Offers flexible contribution design tailored to different employee groups or ownership tiers
• Enhances the firm's appeal to future partners and top-tier talent by strengthening the benefits package
• Provides portability, allowing participants to roll over balances into IRAs or other qualified retirement plans upon exit

SEP IRAs

SEP IRAs are a powerful retirement solution for small businesses and sole proprietors who want to maximize tax savings without the administrative burden of traditional plans. Employers make contributions directly to employee IRAs, offering flexibility and simplicity.

Best for:

• Sole proprietors and small businesses with few or no employees
• Firms with fluctuating income that want to adjust contributions year-to-year
• Employers who prefer to make employer-only contributions
• Businesses seeking maximum tax deductions without annual commitment or complex compliance

Client benefits:

• Contributions are tax-deductible, reducing business tax liability
• No employer-level plan fees; cost-effective for lean operations
• Easy to set up online in minutes with minimal ongoing maintenance
• Employers can skip contributions in lean years, but must contribute equally when they do

SIMPLE IRAs

SIMPLE IRAs are streamlined retirement plans designed for small businesses with 100 or fewer employees. They allow both employer and employee contributions, making them a practical choice for firms that want to offer retirement benefits without the complexity of a 401(k).

Best for:

• Small employers looking to encourage employee participation in retirement savings
• Firms with steady payroll and predictable cash flow
• Businesses seeking a low-cost, low-maintenance retirement plan
• Employers who want to offer a plan but avoid annual nondiscrimination testing

Client benefits:

• Contributions are pre-tax, reducing taxable income for both employees and employers
• SIMPLE IRAs are easy to set up and administer, with no Form 5500 filing required
• Ideal for businesses that want to offer a retirement plan quickly without high administrative overhead

NQDC plans

NQDC plans are strategic tools for businesses that want to retain top talent and reward performance, especially among high-level executives. These plans allow employers to offer customized, performance-based incentives that defer taxes until retirement, making them a powerful complement to traditional qualified plans.

Best for:

• Designing succession plans or long-term retention strategies for key personnel
• Creating performance-driven cultures with incentive-based compensation
• Seeking to go beyond qualified plan limits for high earners
• Looking for flexible plan design without the constraints of IRS nondiscrimination rules

Client benefits:

• Long-term retention through vesting schedules and forfeiture provisions that encourage loyalty
• No nondiscrimination testing, allowing selective eligibility for executives and key employees
• Deferred compensation remains a business asset, usable for operational needs until payout
• Employers can customize contribution timing and amounts, aligning with performance goals
• Employees benefit from tax deferral, paying taxes only when distributions are made—often in retirement when their tax bracket may be lower

How financial advisors can introduce advanced retirement plans to clients

Introducing retirement plans beyond the 401(k) requires a thoughtful approach because many clients are unfamiliar with other options like cash balance, SEP/SIMPLE IRAs, and NQDC. As a financial advisor, your ability to educate and guide clients through these alternatives can set you apart and deepen long-term relationships.

Identify the right candidates

Begin by reviewing your client list for businesses that align with the profiles below:

• Highly profitable firms with aging owners who need to accelerate retirement savings
• Small businesses with few employees and fluctuating income
• Companies seeking succession planning or executive retention strategies
• Employers looking for low-cost, easy-to-administer retirement plans
• Firms interested in maximizing tax deductions or offering performance-based incentives

These businesses are often underserved by traditional 401(k) plans and may benefit significantly from more tailored solutions.

Position the value of advanced plans

Once you've identified potential candidates, frame the conversation around their business goals and challenges. Aim to introduce the topic in a way that connects with your clients’ specific needs, challenges, or decision-making drivers:

• “Attracting and retaining top talent is a challenge for many businesses. I’d like to share some retirement plan strategies that could give your benefits package a competitive edge.”
• “Your current 401(k) is a great foundation, but there are other plans that could help you and your key employees save significantly more on a pre-tax basis.”
• “I’ve been working with clients on retirement strategies that offer greater tax advantages and flexibility than traditional plans. Would you be open to exploring a few options?”

Emphasize simplicity and strategic impact

Clients are more likely to engage when they understand how these plans solve real problems. Highlight benefits such as:

• Higher contribution limits for owners and executives
• Tax-deductible contributions that reduce business liability
• Flexible plan structures that adapt to income fluctuations
• Minimal administrative burden compared to traditional plans
• Enhanced employee retention and succession planning

By positioning yourself as a knowledgeable guide, you help clients make informed decisions that support both their business and personal financial goals.

Get expert support to confidently offer advanced retirement plans

You don’t need to be an expert in every retirement plan type to deliver high-value solutions to your clients. Whether you're navigating complex plan design, evaluating contribution strategies, or simply looking for a second opinion, having access to consultative support can make all the difference. With the right partner, you can confidently recommend and implement alternative plan options without adding administrative burden to your practice.

From plan setup to ongoing administration, expert guidance from Ascensus helps you stay focused on what matters most: growing your business, deepening client relationships, and delivering tailored retirement strategies that drive results.